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Here Are Charlotte’s Web Holdings’ Major Growth Drivers

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Market opportunity

According to Charlotte’s Web Holdings’ (CWBHF) investor presentation, the size of the US supplements market is expected to grow from $41.4 billion in 2016 to more than $50.0 billion in 2021. On the other hand, the size of the CBD-based supplements market in the US is expected to grow at a compound average growth rate of 55% from $174 million in 2016 to $1.6 billion in 2021.

In fiscal 2017, Charlotte’s Web Holdings reported revenues of $40.0 million, a YoY rise of 172%. According to the company’s investor presentation, its revenues have been growing at a faster rate than the overall CBD-based US supplements market. According to the company’s investor presentation, this performance is mainly attributable to Charlotte’s Web Holdings’ vertically integrated business model. The company is focused on strengthening its cultivation, manufacturing, and distribution capabilities in the hemp-based CBD market in the US.

Charlotte’s Web Holdings’ estimated hemp production for fiscal 2018 to be in the range of 250,000 pounds to 350,000 pounds. The company has hemp farms in Colorado and has contract farming arrangements in Oregon and Kentucky. The company operates on 300 acres of irrigated farmland.

According to the company’s investor presentation, Charlotte’s Web Holdings is focusing on areas such as plant genetics, GPS-based hemp planting methodology, and advanced harvesting and drying technology, to rapidly increase its cultivation capability.

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Distribution channels

In 2017, e-commerce channels accounted for 64% of Charlotte’s Web Holdings’ total revenues. Charlotte’s Web Holdings reported a 60% YoY rise in e-commerce sales in 2017. According to the company’s third-quarter earnings press release, Charlotte’s Web Holdings reported a YoY rise in e-commerce sales of 37% and 48% in the third quarter and the first nine months of 2018, respectively.

According to the company’s investor presentation, Charlotte’s Web Holdings also distributed its products through 3,000 retail locations at the end of 2018.

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